Seattle HR Collective: Pay Equity Analysis- Creating a Culture of Empowerment

March 6, 2019
March 6, 2019 HRCollective

Seattle HR Collective: Pay Equity Analysis- Creating a Culture of Empowerment

Michaela Ayers is the Customer Education Lead at Payscale where she focuses on helping and empowering HR professionals make decisions using Payscale tools and data. A lot of her conversations with HR professionals center around trying to help them understand how to be strategic partners within the organizations they work for. Ayers joined Mikaela Kiner at the February Seattle HR Collective Meetup for a fireside chat on pay equity analysis.

How Ayers First Learned About the Topic and How it Became a Passion for Her

Pay equity analysis has come up a lot in conversation with Ayers’ customers, and it is  a topic that has come to the forefront of needing more transparency. When she read an article from The Washington Post published in January 2019 about Citigroup releasing their pay equity data by race and gender, it felt like a big deal when a company, well-known on a global scale, made this information public. To Ayers, it felt like “witnessing the birth of a high-road company” where there was transparency with regard to the need for pay equity at Citigroup. Following this information being made public, a group of activist investors targeted eleven other large companies to confirm how they are working on solving the pay gap issue and how it’s important for companies to disclose data on pay equity including Google, Amazon, American Express, JP Morgan. The targeted companies were mainly leaders and innovators in the tech and financial industries. Ayers thinks it was bold of Citigroup to disclose their pay gap, but the part that she wishes they included was the human connection. The information was released in correlation with annual pay increases. But an executive statement was missing which is important because what a company values is all the more powerful when it comes from the top down. Making sure changes are imbedded and supported by leadership is key and proof of a long-term change for a company.

Difference Between Equity & Equal

Equal is the idea that everyone with the same job title should be paid the same when that is not always the case. It’s really a combination of things that determines what a company pays an individual. This includes factors such as valuing tenure or skills, which controls where each individual is falling in the range that they are in. Equity has to do with how pay decision are made, how bias plays in, and the blending and pulling resources and using data to make those decisions.

Gender Pay Gap: Why the Issue Has Received More Attention

Historically, (at least in this country), it has always been the norm to hide one’s level of pay and employers have enforced that idea of confidentiality within the workplace by telling employees not to talk about their pay.  Ayers feels that Payscale has brought those kinds of discussions out of the dark and sheds light on the need for further understanding around why companies pay what they do and what individuals are worth. We are now living in a time where we have access to more data and tools for individuals to do his or her own research on fair pay.

In addition, well-known companies have been at the forefront with this issue such as Salesforce. Their CEO, Mark Benioff, did not believe that it was possible for the men and women in their workforce to be paid unequally. But he was proven wrong by two of his female executives who had data that proved otherwise and that resulted in a $3M dollar correction.

The Role of HR & Pay Equity

Ayers holds HR professionals in high regard because their roles can be highly complex. The task now is to work on shifting the narrative away from pay being a shameful topic to an empowering one by encouraging employees and making them feel like they are treated fairly and that they have economic stability. It also helps to tie equal pay into a company’s branding philosophy. HR has the opportunity to lead that narrative and introduce it as a normal part of the workplace with data to support. It’s important for companies to be clear with their employees when communicating what equity means, how pay decisions are made and what the company’s values are. When a company is clear on its philosophy as a whole, it becomes clear on how pay decisions are made within an organization. In addition,  HR professionals can utilize tools from Syndio, Sameworks, or Payscale to make and/or justify pay decisions to leadership.    

Is there a Shift in How Companies are Stating their Philosophies Regarding Pay Equity?

It is becoming more common for inclusion to be baked into pay philosophies at companies. It’s important for companies to make people feel like they truly belong and that everyone’s efforts are regarded which can be reflective of pay equity.   What gets measured, get disclosed. Now there is a growing sense of accountability when a company makes information public. Ayers says, “you can’t boil the ocean” but at least the commitment and effort being put toward transparency on pay speaks loudly to its investors and employees.   

Transparency: What are the Risks & Benefits?

Leaders struggle with what transparency means for a company and workplace when it comes to pay. The risk is that its’ complicated and it’s imperative for company leaders to have a shared language with its employees to understand concepts when it comes to conversations involving pay. If a company is not at the point where there is full pay transparency, they could start by  disclosing pay ranges, what they mean, benchmarking jobs, what labor market those jobs are being priced in and what kind of data is being used to make pay decisions. Starting small can be beneficial and it can begin by making employees feel comfortable with having conversations about why they are being paid their rate.

Ways to Influence Company Leaders that it should be a Priority to Correct Pay Equity Issues:  

Ask leaders what their company values are. Employees will start having these conversations whether you like it or not. Stress that fixing the pay gap can transform a company’s culture and that once the investment is made it will better align them with their values. If there was an investment in closing the wage gap, the future would be brighter. The gender wage gap costs the U.S. Economy $1.2 trillion annually.

Women and people of diverse backgrounds are paid differently sometimes based off bias, which is the root of discrimination. Underrepresented groups are typically not in managerial or leadership positions, so they are often excluded from making pay decisions.  It’s imperative to value diversity and representation in boardrooms and at high levels.

Thank you again to Michaela Ayers for speaking at our event!

 

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